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Champaign County Area Home Sales Slip in February

Gains Reported in Median and Average Home Sale Price

Harshwinter
temperatures and the sting of rising interest rates combined to slow the pace
of home sale buyer activity in much of the Champaign County area in February of
2018. Despite slower sales, gains were reported in both the median home sale
and average home sale price. There were hot spots in the market—in the City of
Champaign/Savoy region sales were up 22.6 percent to 65 sales versus 52 one
year ago.

CCAR reports a total of 127 residential homes were sold in
February of 2018 down 16.99 percent from 153 sales in February of 2017. There
were 198 pending sales reported in February the same amount as February 2017.

The
median home sale price for February of 2018 for the Champaign County area was
$151,500 up 9.78 percent from $138,000 reported in February of 2017. The median
is a typical market price where half the homes sold for more, half for less.

The average home sale price stood at: $172,431 up 9.31
percent from $157,749 in February of 2017.

“We definitely saw an up-tick in home sale activity in the
below $200,000 market price range. Home sales stumbled across other areas of the
state in February as it did in pockets of the Champaign County area most likely
due to lower supply levels and the sudden increase in interest rates,” said Max
McComb, president of the Champaign County Association of REALTORS®. “Rising
home prices and steadily increasing interest rates will push the average
monthly mortgage payment up for homebuyers, further challenging the market this
spring. We may see buyers choosing between higher payments or lower-priced
homes. Successful buyers will need to move quickly in this competitive spring
market in making an attractive offer to sellers.”

“The economy is in great shape, most local job markets are
very strong and incomes are slowly rising,” said Lawrence Yun, NAR chief
economist in the January pending home sales report issued 2/28/2018. “The lower
end of the market continues to feel the brunt of these supply and affordability
impediments. With the cost of buying a home getting more expensive and not
enough inventory, some prospective buyers are either waiting until listings
increase come spring or now having to delay their search entirely to save up
for a larger down payment.”

In
2018, Yun forecasts for existing-home sales to be around 5.50 million—roughly
unchanged from 2017 (5.51 million). The national median existing-home price
this year is expected to increase around 2.7 percent.

The average rate on a 30-year fixed rate mortgage for the
month of February according to the Federal Home Loan Mortgage Corporation
(Freddie Mac) was 4.33 percent, up from 4.17 percent in February 2017 and up
from 4.03 in January of 2018. The 30-year fixed-rate mortgage averaged 4.44
percent for the week ending March 15, dropping for the first time in 2018 after
nine consecutive weeks of gains in rates.

“Higher prices often indicate higher demand leading to
competitive bidding,” indicates McComb. “Our market is definitely poised and
ready for an increase in supply, so we are hopeful sellers are preparing their
homes to place on the market as there is a ready and willing buyer base seeking
new inventory. As always it is important that sellers work with a REALTOR® to
help with market analysis and pricing strategy in this competitive marketplace.
We would like to see the funnel of new listings continuing to remain full to
keep pace with the interest of new buyers coming into the market.”

New research from the National Association of REALTORS®
shows that millennials make up more than one-third of the U.S. housing market. Of
that, 65 percent are first-time buyers, according to the NAR
Home Buyers and Sellers Generational Trends Report. Gen
Xers ranked second at 26 percent, followed by Baby Boomers with 32 percent and
the Silent Generation with 6 percent of all home sales.

“In combination with shrinking inventory and
concerns about affordability at the lower end of the price scale,
year-over-year sales numbers are forecast to be lower than in 2017,” states
Geoffrey J. D. Hewings, director of the Regional Economics Applications
Laboratory at the University of Illinois in his March Housing Price
Forecast for the Illinois REALTORS®. Statewide sales forecast for March, April and May suggests decreases on
a yearly basis and increases on a monthly basis for both Illinois and the
Chicago PMSA

The Champaign County Association of REALTORS®
is a voluntary trade organization serving Champaign County and surrounding
areas and is the leading resource for REALTOR® members and an advocate for
homeownership and private property rights. Statistics are from residential
sales within Champaign County. Data compiled by Midwest Real Estate Data, LLC
as available on March 14, 2018.

The Champaign County Association of REALTORS® is the "Voice for Real Estate" in the Champaign County area of Illinois, whose over 400 members are engaged in all facets of the real estate industry. CCAR was chartered in 1917.